HDFC Bank seeks to invest in Go Digit’s life insurance business

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HDFC Bank has entered into a non-binding agreement to invest in Fairfax-backed Go Digit Life Insurance Ltd.

The bank is looking to invest between Rs 49.9 crore and Rs 69.9 crore for up to 9.944% stake in the business, according to an exchange filing. While Go Digit has so far operated in the non-life insurance segment, it is seeking to enter into life insurance, subject to regulatory approvals.

Earlier this month, Go Digit General Insurance Ltd. filed its draft red herring prospectus to raise funds via an initial public offering.

Founded in 2017, Go Digit General Insurance offers insurance in categories such as health, auto, fire and others. In FY22, Go Digit posted a net loss of Rs 295 crore against revenue worth Rs 5,267 crore.

The firm has a customer base of 2.57 crore and has sold a total of 77 lakh insurance policies so far, according to its DRHP. Go Digit General Insurance raised a total of $585.6 million (approximately Rs 4,679 crore) in funding and was backed by investors like Sequoia Capital India, TVS Capital and Wellington Management.

Digit claims to hold a 2.3% market share in the insurance market in India as a whole and a 4.5% share in motor insurance.

Although the DRHP does not indicate how much money it is looking to raise via the IPO, the listing will involve a new issue of shares worth Rs 1,250 crore and a sell offer of 10.95 crore of shares of existing shareholders.

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